Definitions

Blackrock definition#

Blackrock defines megatrends as “structural shifts that are longer-term in nature and have irreversible consequences for the world around us.” If you visualize tech history as a series of S curves, as we have previously discussed, you can easily identify these megatrends after the fact. Our task is to identify and act upon megatrends while we are still in the middle of their evolution.

Population percentages#

The first and easiest feature to notice is that megatrends are measured on the order of magnitude of population percentages. Smaller projects may use absolute numbers of downloads, signups or active users, their monthly or annual percentage growth, or some other vanity metric. Most startups’ projections of total addressable markets (TAM) are complete pie in the sky, but it starts being real when strangers also start talking about adoption in terms of percentage TAM capture.

The momentum of population capture#

The momentum of population capture is important. If you see the adoption go from 1% to 3% to 5% to 7% to 8%, it isn’t the end of things, but the trend is obviously in danger of petering out. Trends have been known to experience revival after a momentary pause; Eugene Wei has a great essay on this, calling these trends invisible asymptotes, but identifying and breaking invisible asymptotes is out of the scope of this course.

Look for double-digit growth#

For our purposes, we play in the kiddie pool of identifying megatrends; my advice is to look for double-digit growth in population adoption from year to year (viral megatrends) or look for trends that have gone on for double-digit years (generational shifts). Population-scale movements are more like ocean liners than tugboats - once they commit to changing direction, they will probably keep moving in that direction for a long while. Long enough for you to jump on, get ahead, and invest at least part of your effort and career.

Vanity metric#

I’ve mentioned the term “vanity metric”. This is slightly derogatory term. All metrics are imperfect, and the better framing is more that there is a hierarchy of metrics that matter. It’s easier to get signups than it is to get active users and easier to get active users than paying users. However, one thing more valuable than money is time.

If your technology measures engagement in hours per day rather than monthly active usage (i.e., someone who uses it five minutes a month counts), then you have established a habit that is sticking and is, therefore, more likely to be worth investing in. The popular way users self-describe this effect is that they are “living in” the tool.

Generational shifts#

Megatrends are often tied to generational shifts. A newer generation will often opt to choose a slightly different way of doing the same thing that has existed before, and for some reason, the later iteration will be the breakout technology instead. This will seem very puzzling to the older generation, who will gripe and grumble that they were on to the hot new thing “before it was cool”.

Platform shifts#

Newer generations do this partially to distance themselves from the past, but often also because platform shifts or new technologies enable things that just couldn’t be done before. For example:

• The smartphone-enabled location-aware apps like Uber
• The Internet-enabled infinite shelf space like Amazon
• Virtualization enabled cloud computing like AWS and Azure
• The personal computer enabled spreadsheet applications like Excel

This is why there is always oversize interest in future potential platform shifts like cryptocurrency, virtual reality, quantum supremacy, and deep learning.

The absence of any prior baggage also allows for skeuomorphism (intentionally crafting the new thing to look like the analog of the old thing, to help intuition when transferring platforms) to eventually be abandoned in favor of “native” assumptions (throwing away all semblance of the old thing and leveraging the full capabilities of the new platform).

Megatrends spread across space as well#

Megatrends don’t just spread across time, but space as well. As William Gibson observed, “the future is here; it’s just not evenly distributed yet.” Because so many startups start out and prove themselves in the US but still take many years before spreading abroad, the Samwer Brothers have made a career starting clones of successful American startups in Europe and Asia.

Chinese students in America have returned home as Hai Gui, setting up the “YouTube of China”, the “Google of China”, the “Amazon of China”, the “Expedia of China”, the “Uber of China”, and so on. The Indian Institutes of Technology have an even closer bond with American institutions. Morris Chang of TSMC and Jensen Huang of Nvidia arethe founders of two generations of semiconductor titans, graduated from MIT and Stanford, had successful careers in the US, and returned home to Taiwan to start their empires. Even within a country, there can be an advantage in importing the future. For example, governments, VC firms, and investment banks are known for organizing inspiration trips from Silicon Valley to New York and back, and from every other city to tech hubs.

The technology used by large companies#

As far as developer megatrends go, one pretty reliable metric is seeing large companies announce that they have adopted a certain technology. When you see Airbnb announce that they have adopted TypeScript or Shopify moving to React Native, these are the end results of months, often years, of careful evaluation and the investment of the equivalent of millions of dollars in developer hours.

Even the announcements have to be carefully vetted by marketing and legal teams, considering the credibility impact of potentially reversing a very public decision. As much as your needs may not be the same as BigCos, endorsements from them do carry more weight because it means that the technology has been vetted for scale, they will contribute open source support, and the technology has formally become a job differentiator both on the recruiting and the prospective employee sides.